Written Commentary
GOLD / SILVER
Not surprisingly August gold has failed at the $1800 level and reached the lowest level since January 22nd. In retrospect, gold and silver were fortunate to have avoided the breakdown earlier this week. Even investors have turned negative toward gold and silver with both gold and silver ETF’s declining yesterday. As if the market needed more bearish news, India announced they would increase gold import taxes! About the most positive argument for gold and silver is that they are approaching a mostly liquidated spec and fund positioning. So far, surging economic uncertainty has seemingly resulted in physical selling instead of flight to quality buying.
PALLADIUM & PLATINUM
Suggestions in the press yesterday suggesting palladium saw a “sugar high” from word of UK sanctions against Russian PGM miner Norilsk Nickel hit the nail on the head, as the flare-up in palladium prices on Wednesday at times was completely out of nowhere. On the other hand, the Russian metal giant plays a significant role in Russian production of 80 metric tonnes. However, traders also likely bought palladium off the potential for a loss of palladium production in the event record power outages entrench in South Africa and disrupt mining and refining activity. The outlook for the platinum market is dismal, with platinum ETF holdings declining by 16,000 ounces in a single day earlier this week and the charts patently negative.
COPPER
While the copper bulls were disappointed with this week’s Chinese manufacturing/nonmanufacturing PMI readings, prices did not cave in until 24 hours later. However, the PMI data from China was somewhat positive given the impact of activity restrictions lingering longer than expected. Unfortunately for the bull camp a stronger than expected private (Caixin) Bank manufacturing PMI reading for June released this morning was completely ignored by the trade.
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